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Tuesday, June 10, 2014

A True Modern Miracle -- Capitalism

More essential reading from Kevin Williamson -- a caution to religious intellectuals to steer clear of matters of which they know little.

“As Marx pointedout,” Professor (Stuart) Smithers writes, “capital is full of contradictions. Capital not only creates wealth, value, and jobs — it also destroys wealth, value, and jobs. Those ‘wondrous technologies’ also manifest as wrathful deities, efficiently eliminating or reducing the need for labor.” The implicit economic hypothesis here is that producing a certain amount of goods more efficiently — in this case, with less labor — makes the world worse off. (“Why not use spoons”) The reality is the opposite, and that is not a matter of opinion, perspective, or ideology — it is a material reality, the denial of which is the intellectual equivalent of insisting on a geocentric or turtles-all-the-way-down model of the universe.

The increasingly global and specialized division of labor and the resulting chains of production — i.e., modern capitalism, the unprecedented worldwide project of voluntary human cooperation that is the unique defining feature of our time — is what cut the global poverty rate in half in 20 years*. It was not Buddhist mindfulness or Catholic homilies that did that. In the 200,000-year history of Homo sapiens, neither of those great religious traditions, nor anything else that human beings ever came up with, made a dent in the poverty rate. Capitalism did.

... “The poor you will always have with you,” Jesus said, but in the capitalist world, that simply is not true — there is no poverty in the capitalist world comparable to poverty in the early 18th century, much less to the poverty that was nearly universal in Jesus’ time. Our people are clothed, fed, and housed, and the few shocking exceptions, as with the case of the neglected mentally ill, are shocking because they are exceptions — and those are not economic failures but political failures.

In 1990, 43% of the population of developing countries lived in extreme poverty (then defined as subsisting on $1 a day); the absolute number was 1.9 billion people. By 2000 the proportion was down to a third. By 2010 it was 21% (or 1.2 billion; the poverty line was then $1.25, the average of the 15 poorest countries’ own poverty lines in 2005 prices, adjusted for differences in purchasing power). The global poverty rate had been cut in half in 20 years.